82 FR 26546 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 7620A To Eliminate the No/Was Corrective Transaction Charge
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 108 (June 7, 2017)
Federal Register Volume 82, Issue 108 (June 7, 2017)
| Page Range | 26546-26548 | |
| FR Document | 2017-11752 |
[Federal Register Volume 82, Number 108 (Wednesday, June 7, 2017)] [Notices] [Pages 26546-26548] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-11752] [[Page 26546]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80843; File No. SR-FINRA-2017-016] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 7620A To Eliminate the No/Was Corrective Transaction Charge June 1, 2017. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on May 23, 2017, Financial Industry Regulatory Authority, Inc. (``FINRA'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as ``establishing or changing a due, fee or other charge'' under section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A)(ii). \4\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change FINRA is proposing to amend FINRA Rule 7620A (FINRA/Nasdaq Trade Reporting Facility Reporting Fees) to eliminate the ``No/Was'' corrective transaction charge from the fee schedule for members that use the FINRA/Nasdaq Trade Reporting Facility (the ``FINRA/Nasdaq TRF'') in light of the elimination of No/Was functionality. Below is the text of the proposed rule change. Proposed new language is in italics; proposed deletions are in brackets. * * * * * 7000. CLEARING, TRANSACTION AND ORDER DATA REQUIREMENTS, AND FACILITY CHARGES * * * * * 7600. DATA PRODUCTS AND CHARGES FOR TRADE REPORTING FACILITY SERVICES 7600A. DATA PRODUCTS AND CHARGES FOR FINRA/NASDAQ TRADE REPORTING FACILITY SERVICES * * * * * 7620A. FINRA/Nasdaq Trade Reporting Facility Reporting Fees The following charges shall be paid by participants for use of the FINRA/Nasdaq Trade Reporting Facility. In the case of trades where the same market participant is on both sides of a trade report, applicable fees assessed on a ``per side'' basis will be assessed once, rather than twice, and the market participant will be assessed applicable Non- Comparison/Accept (Non-Match/Compare) Charges as the Executing Party side only. ------------------------------------------------------------------------ Non-comparison/accept (Non-match/ compare) charges: ------------------------------------------------------------------------ Tape................................... Daily Average Number of Media/ Executing Party Trades During the Month Needed to Qualify for Cap. A...................................... 2500 B...................................... 2500 C...................................... 2500 ------------------------------------------------------------------------ Media/Executing Party ------------------------------------------------------------------------ Monthly Charge......................... Maximum Monthly Charge if Capped. ------------------------------------------------------------------------ ($0.018) x (Number of Media/Executing ($0.018) x (Required Daily Party Reports During the Month). Average Number of Media/EP Trades for Tape A, B or C) x (Number of Trading Days During the Month). ------------------------------------------------------------------------ Non-Media/Executing Party ------------------------------------------------------------------------ Monthly Charge......................... Maximum Monthly Charge if Capped. ------------------------------------------------------------------------ ($0.018) x (Number of Non-Media/ ($0.018) x 2500 for Tape A, B Executing Party Reports During the or C x (Number of Trading Days Month). During the Month). ------------------------------------------------------------------------ Media/Contra ------------------------------------------------------------------------ Monthly Charge......................... Maximum Monthly Charge if Capped. ------------------------------------------------------------------------ ($0.013) x (Number of Media/Contra ($0.013) x 2500 for Tape A, B Reports During the Month). or C x (Number of Trading Days During the Month). ------------------------------------------------------------------------ Media/Contra Cap ------------------------------------------------------------------------ Participants making markets in alternative trading systems registered pursuant to Regulation ATS will qualify for a fee cap applied to all trades under Rule 7620A if they meet the following criteria on a monthly basis: ------------------------------------------------------------------------Participant's percentage of contra media trades must represent at least 35% of their total FINRA/Nasdaq Trade Reporting Facility volume. [[Page 26547]] Participant must be contra to a minimum of 1,000,000 trades in Tape A, 500,000 trades in Tape C and 250,000 trades in Tape B. Participant must complete an attestation form stating that they maintain a two-sided quote in each symbol traded on an alternative trading system registered pursuant to Regulation ATS and display a quotation size of at least one normal unit of trading (specific for each security) thereon. Participants will be audited by Nasdaq, Inc. periodically. ------------------------------------------------------------------------ Maximum Monthly Charge if Capped....... $5,000 per Tape (A, B or C). ------------------------------------------------------------------------ Non-Media/Contra ------------------------------------------------------------------------ Monthly Charge......................... Maximum Monthly Charge if Capped ------------------------------------------------------------------------ ($0.013) x (Number of Non-Media/Contra ($0.013) x 2500 for Tape A, B Reports During the Month). or C x (Number of Trading Days During the Month). Standard Fees: ............................... Clearing report to transfer a $0.03/side. transaction fee charged by one member to another member pursuant to Rule 7230A(h). Comparison/Accept.................. $0.0144/side per 100 shares (minimum 400 shares; maximum 7,500 shares). Late Report--T+N................... $0.288/trade (charged to the Executing Party). Query.............................. $0.50/query. Corrective Transaction Charge...... $0.25/Cancel, Error, Inhibit, or Kill[, or ``No'' portion of No/Was transaction], paid by reporting side; $0.25/Break, Decline transaction, paid by each party. ------------------------------------------------------------------------ Supplementary Material: ------------ .01 through .02 No Change. * * * * * II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The FINRA/Nasdaq TRF is a facility of FINRA that is operated by Nasdaq, Inc. and utilizes Automated Confirmation Transaction (``ACT'') Service technology. In connection with the establishment of the FINRA/ Nasdaq TRF, FINRA and Nasdaq, Inc. entered into a limited liability company agreement (the ``LLC Agreement'').\5\ Under the LLC Agreement, FINRA, the ``SRO Member,'' has sole regulatory responsibility for the FINRA/Nasdaq TRF. Nasdaq, Inc., the ``Business Member,'' is primarily responsible for the management of the FINRA/Nasdaq TRF's business affairs, including establishing pricing for use of the FINRA/Nasdaq TRF, to the extent those affairs are not inconsistent with the regulatory and oversight functions of FINRA. Additionally, the Business Member is obligated to pay the cost of regulation and is entitled to the profits and losses, if any, derived from the operation of the FINRA/Nasdaq TRF. --------------------------------------------------------------------------- \5\ As approved by its board of directors and the Commission, effective September 8, 2015, The NASDAQ OMX Group, Inc. changed its legal name to Nasdaq, Inc. See Nasdaq, Inc. Form 8-K Current Report (filed September 8, 2015) (available at www.sec.gov/Archives/edgar/data/1120193/000119312515314459/d48431d8k.htm). FINRA and Nasdaq, Inc. are in the process of amending the LLC Agreement to reflect the name change, and FINRA will file a separate proposed rule change to update the FINRA manual accordingly. --------------------------------------------------------------------------- Pursuant to the FINRA Rule 7600A Series, FINRA members that are FINRA/Nasdaq TRF participants are charged fees and may qualify for fee caps (Rule 7620A) and also may qualify for revenue sharing payments for trade reporting to the FINRA/Nasdaq TRF (Rule 7610A). These rules are administered by Nasdaq, Inc., in its capacity as the Business Member and operator of the FINRA/Nasdaq TRF on behalf of FINRA,\6\ and Nasdaq, Inc. collects all fees on behalf of the FINRA/Nasdaq TRF. --------------------------------------------------------------------------- \6\ FINRA's oversight of this function performed by the Business Member is conducted through a recurring assessment and review of TRF operations by an outside independent audit firm. --------------------------------------------------------------------------- FINRA/Nasdaq TRF participants are required to correct trade reports that are inaccurate and may use one of several FINRA/Nasdaq TRF functions (collectively referred to herein as ``Corrective Transactions'') to do so, including ``No/Was.'' Firms would use a No/ Was submission to correct the details of a trade reported earlier in the day. Under FINRA Rule 7620A, FINRA/Nasdaq TRF participants are assessed a fee of $0.25 for Corrective Transactions, including No/Was submissions. FINRA notes that the Corrective Transaction fee is the same, irrespective of the functionality used to correct the trade. In addition to the Corrective Transaction fee, reporting firms are also assessed the applicable fee for submission of the corrected or replacement trade report.\7\ --------------------------------------------------------------------------- \7\ Due to their nature, Corrective Transactions consume system capacity and staff resources disproportionate to those required for standard reporting transactions, and disproportionate to the fee imposed for standard reporting functions. Thus, to cover a portion of the costs of processing Corrective Transactions, the FINRA/Nasdaq TRF assesses a Corrective Transaction Charge to such transactions. --------------------------------------------------------------------------- On September 15, 2016, Nasdaq, Inc., as the Business Member, provided notice that effective October 31, 2016, the FINRA/Nasdaq TRF would no longer support No/Was functionality.\8\ According to Nasdaq, Inc., the No/Was logic added complexity to the system with no real benefit, since the [[Page 26548]] functionality may be replicated by FINRA/Nasdaq TRF participants by simply cancelling the original report and submitting a corrected report. Nasdaq, Inc. has advised FINRA that prior to the disablement of the functionality, the volume of No/Was transactions was de minimis. For example, there were fewer than 850 No/Was submissions on average per month during the period from January through July 2016. By contrast, there were 841,000 total Corrective Transaction submissions on average per month during that same period (i.e., No/Was submissions accounted for approximately one tenth of one percent of all Corrective Transaction submissions). --------------------------------------------------------------------------- \8\ See Nasdaq Equity Trader Alert #2016-179 (available at http://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2016-179). --------------------------------------------------------------------------- To ensure that the fee schedule under FINRA rules accurately reflects current FINRA/Nasdaq TRF functionality, FINRA is proposing to eliminate the reference to No/Was submissions for purposes of the Corrective Transaction charge under Rule 7620A. FINRA has filed the proposed rule change for immediate effectiveness. The effective date will be the date of filing, May 23, 2017. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of section 15A(b)(5) of the Act,\9\ which requires, among other things, that FINRA rules provide for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system that FINRA operates or controls. All similarly situated members are subject to the same fee structure, and access to the FINRA/Nasdaq TRF is offered on fair and non-discriminatory terms. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78o-3(b)(5). --------------------------------------------------------------------------- Nasdaq, Inc., as the Business Member, has advised FINRA that it eliminated No/Was functionality effective October 31, 2016 to reduce complexity in the FINRA/Nasdaq TRF system and that such functionality can readily be replicated by participants. The proposed rule change merely deletes the reference to No/Was Corrective Transactions in Rule 7620A to ensure that the fee schedule accurately reflects current FINRA/Nasdaq TRF functionality. As such, the proposed rule change provides for the equitable allocation of reasonable fees for use of the FINRA/Nasdaq TRF. B. Self-Regulatory Organization's Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change merely deletes the reference to No/Was Corrective Transactions in Rule 7620A to ensure that the fee schedule accurately reflects current FINRA/ Nasdaq TRF functionality. As discussed above, No/Was functionality was eliminated, but may be replicated by FINRA/Nasdaq TRF participants by simply canceling the incorrect trade report and submitting a corrected trade report, and firms would incur the same charge, irrespective of the type of Corrective Transaction submitted.\10\ As such, the proposed rule change will have no fee impact on firms for Corrective Transaction submissions to the FINRA/Nasdaq TRF.\11\ --------------------------------------------------------------------------- \10\ Also, as discussed above, the volume of No/Was transactions was de minimis prior to the disablement of the functionality, accounting for approximately one tenth of one percent of all Corrective Transaction submissions from January through July 2016. \11\ FINRA also believes that the elimination of the No/Was functionality itself had little to no cost impact on firms, and did not result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act \12\ and paragraph (f)(2) of Rule 19b-4 thereunder.\13\ At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-FINRA-2017-016 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-FINRA-2017-016. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-FINRA-2017-016, and should be submitted on or before June 28, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-11752 Filed 6-6-17; 8:45 am] BILLING CODE 8011-01-P
![26546 Federal Register / Vol. 82, No. 108 / Wednesday, June 7, 2017 / Notices
SECURITIES AND EXCHANGE 4(f)(2) thereunder,4 which renders the 7600. DATA PRODUCTS AND
COMMISSION proposal effective upon receipt of this CHARGES FOR TRADE REPORTING
filing by the Commission. The FACILITY SERVICES
[Release No. 34–80843; File No. SR–FINRA–
2017–016]
Commission is publishing this notice to
solicit comments on the proposed rule 7600A. DATA PRODUCTS AND
change from interested persons. CHARGES FOR FINRA/NASDAQ
Self-Regulatory Organizations; TRADE REPORTING FACILITY
Financial Industry Regulatory I. Self-Regulatory Organization’s SERVICES
Authority, Inc.; Notice of Filing and Statement of the Terms of the Substance
Immediate Effectiveness of a Proposed of the Proposed Rule Change * * * * *
Rule Change To Amend FINRA Rule
7620A To Eliminate the No/Was FINRA is proposing to amend FINRA 7620A. FINRA/Nasdaq Trade Reporting
Corrective Transaction Charge Rule 7620A (FINRA/Nasdaq Trade Facility Reporting Fees
Reporting Facility Reporting Fees) to
June 1, 2017. eliminate the ‘‘No/Was’’ corrective The following charges shall be paid
Pursuant to section 19(b)(1) of the transaction charge from the fee schedule by participants for use of the FINRA/
Securities Exchange Act of 1934 for members that use the FINRA/Nasdaq Nasdaq Trade Reporting Facility. In the
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Trade Reporting Facility (the ‘‘FINRA/ case of trades where the same market
notice is hereby given that on May 23, Nasdaq TRF’’) in light of the elimination participant is on both sides of a trade
2017, Financial Industry Regulatory of No/Was functionality. report, applicable fees assessed on a
Authority, Inc. (‘‘FINRA’’) filed with the Below is the text of the proposed rule ‘‘per side’’ basis will be assessed once,
Securities and Exchange Commission change. Proposed new language is in rather than twice, and the market
(‘‘SEC’’ or ‘‘Commission’’) the proposed italics; proposed deletions are in participant will be assessed applicable
rule change as described in Items I, II, brackets. Non-Comparison/Accept (Non-Match/
and III below, which Items have been * * * * * Compare) Charges as the Executing
prepared by FINRA. FINRA has Party side only.
designated the proposed rule change as 7000. CLEARING, TRANSACTION AND
‘‘establishing or changing a due, fee or ORDER DATA REQUIREMENTS, AND
other charge’’ under section FACILITY CHARGES
19(b)(3)(A)(ii) of the Act 3 and Rule 19b– * * * * *
Non-comparison/accept (Non-match/compare) charges:
Tape .......................................................................................................... Daily Average Number of Media/Executing Party Trades During the
Month Needed to Qualify for Cap.
A ............................................................................................................... 2500
B ............................................................................................................... 2500
C ............................................................................................................... 2500
Media/Executing Party
Monthly Charge ........................................................................................ Maximum Monthly Charge if Capped.
($0.018) × (Number of Media/Executing Party Reports During the ($0.018) × (Required Daily Average Number of Media/EP Trades for
Month). Tape A, B or C) × (Number of Trading Days During the Month).
Non-Media/Executing Party
Monthly Charge ........................................................................................ Maximum Monthly Charge if Capped.
($0.018) × (Number of Non-Media/Executing Party Reports During the ($0.018) × 2500 for Tape A, B or C × (Number of Trading Days During
Month). the Month).
Media/Contra
Monthly Charge ........................................................................................ Maximum Monthly Charge if Capped.
($0.013) × (Number of Media/Contra Reports During the Month) ........... ($0.013) × 2500 for Tape A, B or C × (Number of Trading Days During
the Month).
Media/Contra Cap
Participants making markets in alternative trading systems registered
pursuant to Regulation ATS will qualify for a fee cap applied to all
trades under Rule 7620A if they meet the following criteria on a
sradovich on DSK3GMQ082PROD with NOTICES
monthly basis:
• Participant’s percentage of contra media trades must represent at
least 35% of their total FINRA/Nasdaq Trade Reporting Facility vol-
ume.
1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78s(b)(3)(A)(ii).
2 17 CFR 240.19b–4. 4 17 CFR 240.19b–4(f)(2).
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![Federal Register / Vol. 82, No. 108 / Wednesday, June 7, 2017 / Notices 26547
Non-comparison/accept (Non-match/compare) charges:
• Participant must be contra to a minimum of 1,000,000 trades in Tape
A, 500,000 trades in Tape C and 250,000 trades in Tape B.
• Participant must complete an attestation form stating that they main-
tain a two-sided quote in each symbol traded on an alternative trad-
ing system registered pursuant to Regulation ATS and display a
quotation size of at least one normal unit of trading (specific for each
security) thereon. Participants will be audited by Nasdaq, Inc. peri-
odically.
Maximum Monthly Charge if Capped ....................................................... $5,000 per Tape (A, B or C).
Non-Media/Contra
Monthly Charge ........................................................................................ Maximum Monthly Charge if Capped
($0.013) × (Number of Non-Media/Contra Reports During the Month) ... ($0.013) × 2500 for Tape A, B or C × (Number of Trading Days During
the Month).
Standard Fees:
Clearing report to transfer a transaction fee charged by one mem- $0.03/side.
ber to another member pursuant to Rule 7230A(h).
Comparison/Accept ........................................................................... $0.0144/side per 100 shares (minimum 400 shares; maximum 7,500
shares).
Late Report—T+N ............................................................................. $0.288/trade (charged to the Executing Party).
Query ................................................................................................. $0.50/query.
Corrective Transaction Charge ......................................................... $0.25/Cancel, Error, Inhibit, or Kill[, or ‘‘No’’ portion of No/Was trans-
action], paid by reporting side; $0.25/Break, Decline transaction, paid
by each party.
• • • Supplementary Material: Under the LLC Agreement, FINRA, the FINRA/Nasdaq TRF participants are
—————— ‘‘SRO Member,’’ has sole regulatory required to correct trade reports that are
.01 through .02 No Change. responsibility for the FINRA/Nasdaq inaccurate and may use one of several
* * * * * TRF. Nasdaq, Inc., the ‘‘Business FINRA/Nasdaq TRF functions
Member,’’ is primarily responsible for (collectively referred to herein as
II. Self-Regulatory Organization’s the management of the FINRA/Nasdaq ‘‘Corrective Transactions’’) to do so,
Statement of the Purpose of, and TRF’s business affairs, including including ‘‘No/Was.’’ Firms would use a
Statutory Basis for, the Proposed Rule establishing pricing for use of the No/Was submission to correct the
Change FINRA/Nasdaq TRF, to the extent those details of a trade reported earlier in the
In its filing with the Commission, affairs are not inconsistent with the day. Under FINRA Rule 7620A, FINRA/
FINRA included statements concerning regulatory and oversight functions of Nasdaq TRF participants are assessed a
the purpose of and basis for the FINRA. Additionally, the Business fee of $0.25 for Corrective Transactions,
proposed rule change and discussed any Member is obligated to pay the cost of including No/Was submissions. FINRA
comments it received on the proposed regulation and is entitled to the profits notes that the Corrective Transaction fee
rule change. The text of these statements and losses, if any, derived from the is the same, irrespective of the
may be examined at the places specified operation of the FINRA/Nasdaq TRF. functionality used to correct the trade.
in Item IV below. FINRA has prepared In addition to the Corrective
Pursuant to the FINRA Rule 7600A
summaries, set forth in sections A, B, Transaction fee, reporting firms are also
Series, FINRA members that are FINRA/
and C below, of the most significant assessed the applicable fee for
Nasdaq TRF participants are charged
aspects of such statements. submission of the corrected or
fees and may qualify for fee caps (Rule
replacement trade report.7
A. Self-Regulatory Organization’s 7620A) and also may qualify for revenue
On September 15, 2016, Nasdaq, Inc.,
Statement of the Purpose of, and sharing payments for trade reporting to
as the Business Member, provided
Statutory Basis for, the Proposed Rule the FINRA/Nasdaq TRF (Rule 7610A). notice that effective October 31, 2016,
Change These rules are administered by Nasdaq, the FINRA/Nasdaq TRF would no
Inc., in its capacity as the Business longer support No/Was functionality.8
1. Purpose
Member and operator of the FINRA/ According to Nasdaq, Inc., the No/Was
The FINRA/Nasdaq TRF is a facility Nasdaq TRF on behalf of FINRA,6 and logic added complexity to the system
of FINRA that is operated by Nasdaq, Nasdaq, Inc. collects all fees on behalf with no real benefit, since the
Inc. and utilizes Automated of the FINRA/Nasdaq TRF.
Confirmation Transaction (‘‘ACT’’) 7 Due to their nature, Corrective Transactions
Service technology. In connection with Report (filed September 8, 2015) (available at consume system capacity and staff resources
the establishment of the FINRA/Nasdaq www.sec.gov/Archives/edgar/data/1120193/ disproportionate to those required for standard
sradovich on DSK3GMQ082PROD with NOTICES
TRF, FINRA and Nasdaq, Inc. entered 000119312515314459/d48431d8k.htm). FINRA and reporting transactions, and disproportionate to the
Nasdaq, Inc. are in the process of amending the LLC fee imposed for standard reporting functions. Thus,
into a limited liability company Agreement to reflect the name change, and FINRA to cover a portion of the costs of processing
agreement (the ‘‘LLC Agreement’’).5 will file a separate proposed rule change to update Corrective Transactions, the FINRA/Nasdaq TRF
the FINRA manual accordingly. assesses a Corrective Transaction Charge to such
5 As approved by its board of directors and the 6 FINRA’s oversight of this function performed by transactions.
Commission, effective September 8, 2015, The the Business Member is conducted through a 8 See Nasdaq Equity Trader Alert #2016–179
NASDAQ OMX Group, Inc. changed its legal name recurring assessment and review of TRF operations (available at http://www.nasdaqtrader.com/
to Nasdaq, Inc. See Nasdaq, Inc. Form 8–K Current by an outside independent audit firm. TraderNews.aspx?id=ETA2016-179).
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![26548 Federal Register / Vol. 82, No. 108 / Wednesday, June 7, 2017 / Notices
functionality may be replicated by necessary or appropriate in furtherance Electronic Comments
FINRA/Nasdaq TRF participants by of the purposes of the Act. The
simply cancelling the original report proposed rule change merely deletes the • Use the Commission’s Internet
and submitting a corrected report. reference to No/Was Corrective comment form (http://www.sec.gov/
Nasdaq, Inc. has advised FINRA that Transactions in Rule 7620A to ensure rules/sro.shtml); or
prior to the disablement of the that the fee schedule accurately reflects • Send an email to rule-comments@
functionality, the volume of No/Was current FINRA/Nasdaq TRF sec.gov. Please include File Number SR–
transactions was de minimis. For functionality. As discussed above, No/ FINRA–2017–016 on the subject line.
example, there were fewer than 850 No/ Was functionality was eliminated, but
Was submissions on average per month may be replicated by FINRA/Nasdaq Paper Comments
during the period from January through TRF participants by simply canceling
July 2016. By contrast, there were • Send paper comments in triplicate
the incorrect trade report and
841,000 total Corrective Transaction to Secretary, Securities and Exchange
submitting a corrected trade report, and
submissions on average per month firms would incur the same charge, Commission, 100 F Street NE.,
during that same period (i.e., No/Was irrespective of the type of Corrective Washington, DC 20549–1090.
submissions accounted for Transaction submitted.10 As such, the All submissions should refer to File
approximately one tenth of one percent proposed rule change will have no fee Number SR–FINRA–2017–016. This file
of all Corrective Transaction impact on firms for Corrective number should be included on the
submissions). Transaction submissions to the FINRA/ subject line if email is used. To help the
To ensure that the fee schedule under Nasdaq TRF.11 Commission process and review your
FINRA rules accurately reflects current
C. Self-Regulatory Organization’s comments more efficiently, please use
FINRA/Nasdaq TRF functionality,
FINRA is proposing to eliminate the Statement on Comments on the only one method. The Commission will
reference to No/Was submissions for Proposed Rule Change Received From post all comments on the Commission’s
purposes of the Corrective Transaction Members, Participants, or Others Internet Web site (http://www.sec.gov/
charge under Rule 7620A. Written comments were neither rules/sro.shtml). Copies of the
FINRA has filed the proposed rule solicited nor received. submission, all subsequent
change for immediate effectiveness. The amendments, all written statements
effective date will be the date of filing, III. Date of Effectiveness of the with respect to the proposed rule
May 23, 2017. Proposed Rule Change and Timing for change that are filed with the
Commission Action Commission, and all written
2. Statutory Basis The foregoing rule change has become communications relating to the
FINRA believes that the proposed rule effective pursuant to section 19(b)(3)(A) proposed rule change between the
change is consistent with the provisions of the Act 12 and paragraph (f)(2) of Commission and any person, other than
of section 15A(b)(5) of the Act,9 which Rule 19b–4 thereunder.13 At any time those that may be withheld from the
requires, among other things, that within 60 days of the filing of the public in accordance with the
FINRA rules provide for the equitable proposed rule change, the Commission provisions of 5 U.S.C. 552, will be
allocation of reasonable dues, fees and summarily may temporarily suspend available for Web site viewing and
other charges among members and such rule change if it appears to the
printing in the Commission’s Public
issuers and other persons using any Commission that such action is
Reference Room, 100 F Street NE.,
facility or system that FINRA operates necessary or appropriate in the public
or controls. All similarly situated interest, for the protection of investors, Washington, DC 20549 on official
members are subject to the same fee or otherwise in furtherance of the business days between the hours of
structure, and access to the FINRA/ purposes of the Act. If the Commission 10:00 a.m. and 3:00 p.m. Copies of the
Nasdaq TRF is offered on fair and non- takes such action, the Commission shall filing also will be available for
discriminatory terms. institute proceedings to determine inspection and copying at the principal
Nasdaq, Inc., as the Business Member, whether the proposed rule should be office of FINRA. All comments received
has advised FINRA that it eliminated approved or disapproved. will be posted without change; the
No/Was functionality effective October Commission does not edit personal
31, 2016 to reduce complexity in the Solicitation of Comments identifying information from
FINRA/Nasdaq TRF system and that Interested persons are invited to submissions. You should submit only
such functionality can readily be submit written data, views, and information that you wish to make
replicated by participants. The proposed arguments concerning the foregoing, available publicly. All submissions
rule change merely deletes the reference including whether the proposed rule should refer to File Number SR–FINRA–
to No/Was Corrective Transactions in change is consistent with the Act. 2017–016, and should be submitted on
Rule 7620A to ensure that the fee Comments may be submitted by any of or before June 28, 2017.
schedule accurately reflects current the following methods:
For the Commission, by the Division of
FINRA/Nasdaq TRF functionality. As
10 Also, as discussed above, the volume of No/ Trading and Markets, pursuant to delegated
such, the proposed rule change provides
Was transactions was de minimis prior to the authority.14
for the equitable allocation of reasonable disablement of the functionality, accounting for
fees for use of the FINRA/Nasdaq TRF. Eduardo A. Aleman,
approximately one tenth of one percent of all
sradovich on DSK3GMQ082PROD with NOTICES
Corrective Transaction submissions from January Assistant Secretary.
B. Self-Regulatory Organization’s through July 2016. [FR Doc. 2017–11752 Filed 6–6–17; 8:45 am]
Statement on Burden on Competition 11 FINRA also believes that the elimination of the
BILLING CODE 8011–01–P
FINRA does not believe that the No/Was functionality itself had little to no cost
impact on firms, and did not result in any burden
proposed rule change will result in any on competition that is not necessary or appropriate
burden on competition that is not in furtherance of the purposes of the Act.
12 15 U.S.C. 78s(b)(3)(A).
9 15 U.S.C. 78o–3(b)(5). 13 17 CFR 240.19b–4(f)(2). 14 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 16:37 Jun 06, 2017 Jkt 241001 PO 00000 Frm 00126 Fmt 4703 Sfmt 9990 E:\FR\FM\07JNN1.SGM 07JNN1](https://thefederalregister.org/doc/82_FR_26654/page/3.svg)
Document Created: 2017-06-07 02:01:16
Document Modified: 2017-06-07 02:01:16
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 82 FR 26546 |
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